Ted Simons: The Arizona legislature is back in session, which means the Arizona Capitol Times is back with us for mid-week legislative update. And joining me now to talk about the first few days of the 51st Arizona State legislature is Jim Small of the Arizona Capitol Times. Good to see you again and thanks for joining us.

Jim Small: Thanks for having us.

Ted Simons: Let's start with the state of the state speech which got everything kicked off here, general thoughts.

Jim Small: Governor Brewer hit a lot of topics as the speeches often do, you know. It's, basically, sit setting out the agenda and what she wants to see, so she talked about the major focus of the speech, was bragging in a way, kind of looking at what Arizona has done since she took office in 2009 when the state was really just kind of hitting the peak of the financial crisis. And state budget was crumbling, to where the state has a budget that is balanced. Although, you know, with some maneuvers they will have to be taking care of in the next couple of YEAR, but it's a balanced budget. The economy coming back the sales tax, the temporary tax is ready to go away, and you know, and she talked about how all the things that policymakers have done the last three or four years have really put the state into good position to move forward, how we have gone from having hundreds of thousands of job losses to now being one of the top job creators from the nation in the top four entrepreneurial startups, and so, that was a big focus, and she laid out what she want to see to expand in the upcoming year.

Ted Simons: It's, it's universally considered more, a little more substance, a little more gravitas, more in the way of specifics than Governor brewer's speeches?

Jim Small: These speeches are always tough. You have to kind of walk the line, I think, between, you know, giving details, which you don't want to mire it down in details and make is a wonkish speech, but at the same time, you want to paint the picture, here's where we're going to go and my vision of the state in the next couple of years, and that certainly is what she was doing.

Ted Simons: In one place most folks did not expect her to go, were the yesterday of expanding Medicaid, that really was a surprise, wasn't it?

Jim Small: It was surprise, and I think that, you know, certainly, just about everybody in the room was bit surprised to hear, to hear what she said, and not just, did she talked about expanding Medicaid, and this is one of those things that the legislators did during the crisis, where the voters in 2000 had approved a ballot measure requiring the state to expand the Medicaid rolls for our Access program, and legislators put a freeze on that, and said ok, we don't have the money to pay for this. We are going to freeze enrollment the way it is and not let anyone new join on outside of the people required by Federal law. Most people anticipated if the Governor was going to touch this area, she would call for going back to what the voters had said, instead what she called for was spanning it fully under what's required by the federal health care law, the Affordable Care Act, and that's something that, in that I think, that a lot of people had not expected her to do, given how fierce of critic she's been with Obama Care and that whole issue.

Ted Simons: Yet she said, do the math, and the math does suggest that matching funds, enhanced matching funds from the Federal Government makes sense and helps Arizona except you have leadership in the legislature, specifically Senate President Andy Biggs. They are not sure that money going to be there. They are not sure if this is the wisest course of action. How big of a fight is coming up on this?

Jim Small: It remains to be seen. A lot of people are drawing comparisons between what happened in 2009, when Governor Brewer addressed the legislature after taking office can called for a temporary sales tax, and that was an event that was memorable for, for legislators getting up and walking out of the speech for what turned into year-long battle, more in an a year at that point, actually, to get that thing passed and put it on the ballot. This time, Republicans were more reserved, there are, obviously, concerns. But, there is a more nuanced issue; sales taxes are black and white. You either are for them or against them. And this one, you know, the Governor, she talked about the math and the impact this has on Arizona's economy, and the need that we have, you know, even from a moral perspective to insuring the people, and she talked about how it would not affect the general fund, but, no one is seeing the details, and I think that it's going to take those details to present to lawmakers, to Republican lawmakers for her to make her case to say, I know that you are, your natural setting will be opposed to this but here's why you should do it and let me explain why this is a good thing for Arizona.

Ted Simons: Will we see the details when the budget is released?

Jim Small: My guess is we'll see some of them. I don't know to what extent we're going to see them. And, some of the details are probably still up in the air. I am sure that there are unanswered questions from the Federal Government. This is, after all, you know, state version of the Federal program. So, if we are going to make changes we need to -- or find different ways to pay for it, we'll have to, you know, doesn't have to be, an effort made to find those answers in the Federal Government.

Ted Simons: The Governor also mentioned education, a performance funding plan, and these things. I don't know how much we know about this, as yet. We do know that, as far as the budget is concerned, a whole new set of dynamics after a court ruling yesterday. Talk to us about that.

Jim Small: So yesterday, the Arizona court of appeals overturned lower court ruling. Again, from a budget decision that stems back to the financial crisis, when Arizona decided to, to not fully fund education under what voters had required and, and I want to say it was 2002, with proposition 301, a sales tax dedicated for education, and the state was supposed to, to, or, you were the argument was, the state was supposed to fund inflation every year, so figure out what the, the, what the inflation was every year, and fund education at that level so at the bare minimum it stayed even, and it did not lose money year over year are because of inflation. The legislature decided that it wasn't going to do that, in an effort to save 60 million, when it was cut, you know, 1.5 billion, and this is one piece of multi-faceted cut to, to state programs. And, and a lower court upheld that and said, voters do not have the authority to tell every legislature from here until eternity that they have to spend this. The appeals court said no, that argument doesn't fly. This is clearly the voters knew what they were doing, and all of this were, was out there, and on top of that, it was the legislature who put this on the ballot, who, who wanted voters to approve this, so the legislature cannot turn around later and say, well, we don't have the money and we think it means something different.

Ted Simons: You cannot pick and choose, inflation is as inflation does, and you have got to accommodate it. And we're talking accommodations here to the tune of, what, 80 some million a year? Something along these lines? That's a budget buster, isn't it? Or close to it?

Jim Small: It's not a budget buster, we're talking about a $10 billion budget, so 80 million is, it's a lot of money, and, you know, especially when the state just now recovering and trying to figure out, you know, not -- trying not to overextend itself, that's one of the concerns not to over-extend the budget so we don't get ourselves right back into the situation if the takes a downturn. Andy Biggs, who talked to one of my colleagues today and said that, you know, if we are going to have to pay for this, then extra funding for education programs, may be out the window because, we're already planning on spending 70 million to increase education just because of an increase in student growth, and so now if we got to put 80 million on top of that, well, all of this money that say the business community and the education community wants for the Common Core Standards, maybe that's not going to be there.

Ted Simons: And I guess, budget busting was a hyperbole, but it changes that balance, and you have got to wonder, will it cancel planned education spending? The Governor talked about the Common Core, and the other things, and is that stuff all in the rear-view mirror now?

Jim Small: There was a huge, a huge meeting today, committee meeting today at the state house where we have three committees who met. They brought in people from the education community to talk about the Common Core Standards, why they are important, and why they are needed to, to properly train Arizona high school students, faculty, and ultimately, do away with the AIMS program that everyone has kind of come to an agreement on, that does not really work. So, this issue is out there, the business community is committed to fighting for this, and which goes a long way, and I think that, that the Governor's office will fight for this, too.

Ted Simons: Ok. And the Governor also mentioned guns in schools, and not wanting to turn a school into a fortress, and yet wanting more money for school resource officers, which I think those are cut by the legislature couple of years ago. With that in mind, Senator Rich Crandall comes out with a school safety plan, Sheriff Paul Babeu at his side. What's this about?

Jim Small: It's a hybrid of different ideas that we have seen around, it would increase money for, for school resource officers, for, for armed and licensed police officers, to be on campus. It would also increase money for school counselors. With the idea that, that if you have more school counselors, who are not overworked and overburdened, that, that maybe they will be able to stop the problems before they become problems, and deal with these kids and give them the treatment and identify problems, identify, you know, kids who may be have a mental illness before it becomes serious issue, and you know, you also talked about allowing teachers to carry, to carry weapons in the classroom. And, you know, to be, to, to allow more guns, just into the school area in general, and, which was something that we heard from others on the right. It’d be curious to see what we end up, what we end up getting. The Governor still has to -- she talked about that in her state of the state speech about wanting to make sure schools are safer, we have not seen her plans or plans for, for, from the leaders, either, and I can only imagine that those are going it be out there, and at the end of the day lawmakers are going to have plethora of options to choose from.

Ted Simons: And we have seen plans as you alluded to, so again, you could probably see a bunch of stuff on the table, and that might be one of those deals where compromise rears its head.

Jim Small: Either it rears its head or they decide to do nothing. I think that that's also distinct possibility.

Jim Small: Not yet but, they are not doing too much right now. They are all, you know, you have a crop of 30 new lawmakers, 29 new lawmakers, so this is really the introductory week, like the first week back to school where you go to the classes, you get introduced to the teacher, and you get the syllabus. You don't get a lot of homework and you are not writing papers yet. That will come, and we're going to have those issues and those fun scraps without doubt.

Ted Simons: And you are not looking at a lot of cuts and serious decisions made, where in the previous years a lot of glum faces.

Jim Small: In previous years, opening day was the day you started talking about the budget from the current year that was already in the red, and you had to go back and fix it.

Ted Simons: Good stuff. Looking forward to hearing from the capitol times every Wednesday.